How strong is PDT Partners?

bnewo's picture
Rank: Chimp | banana points 11

Hi all,

PDT Partners is a lesser known hedge fund around here since they tend to keep a very low profile and hire in a very similar way to RenTech. Moreover, they do not manage nearly as much money when compared with some of these other big hitters.

I am trying to gauge, where does their fund rank in terms of performance now and how might we expect to perform in the future? Are they really going to be something like "the next Rentech"?

To get a feel for their performance, I was inspecting their past results on WhaleWisdom and saw that they have been performing very well. However, something to keep in mind is that only a small fraction of their AUM appears to be in the stock market and therefore something that we are able to track directly on WhaleWisdom (due to SEC Form 4 filings).

Something very nice about their culture (and I would imagine RenTech's as well) vs. Citadel/Two Sigma/D.E. Shaw is a 40 hour work week, a collaborative work environment, and a long-term investment in new hires. However, I would expect that they give somewhat lower comp then the latter.

With that in mind, can you estimate a rank of these employers in terms of desirability? I would suspect RenTech is the clear frontrunner, but I'm not sure where PDT falls with respect to the others.

EDIT : Since I'm a new user I cannot post links to the whalewisdom pages.

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Comments (10)

Mar 9, 2019

Hey bnewo, the following topics might be helpful:

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Hope that helps.

Most Helpful
Mar 12, 2019

PDT is an excellent shop. It started as a prop team at Morgan Stanley and became very profitable there. It was a Volker Rule (regulatory ban on bank prop trading) casualty and spun off as a hedge fund. It continues to have a prop-like culture in that they don't seek to raise a ton of money and they turn away many investors. They prioritize performance over scale.

It is a much more focused business than Citadel or Two Sigma. Those firms are running a much more diverse array of businesses (retail market-making, discretionary, HFT, macro, stat-arb equities, etc.). PDT is known for stat-arb equities and, while I'm sure there are other things, they aren't a hugely diversified asset manager.

I don't think an "employer ranking" is very useful. It depends on your priorities and the specific role offered. Unless you have offers in hand from all of them, I wouldn't waste a second thinking about which one "ranks higher". That is a stupid obsession of students on the internet. People working in these firms care about how much they get paid, not how their employer "ranks".

You've got a few more misconceptions. The "40 hour work week" is a joke. No one is going to time how long you sit at your desk. Your colleagues will be very smart and work very hard. If you want to develop something profitable and move up in the firm, expect to work a lot more than 40 hours a week. You might not get fired if you work only 40, that's the most that can be said. Every place claims they have a collaborative work environment and investment in new hires. It's an empty statement. Citadel and Two Sigma are well known for being extremely silo'd, largely to protect their intellectual property. You are prohibited from meaningfully collaborating with 95% of the company. Wake up.

I've interviewed quite a few people from all these shops. Nowadays, Citadel and Two sigma are not the best places to start out at. They are pretty much at saturation in all their businesses. Not a ton of opportunities lying around. They make sure none of the young people know too much and have stringent non-competes. They are good at holding down the value of their new hires so they can control costs. The names look good on a resume, which is good because you'll be interviewing for a new job (and then sitting out a non-compete) within two years. I think PDT has more green grass ahead and has not become as institutionalized. They are slightly less well-known, but so what. Anyone that matters knows PDT and will ask for an interview if they get a candidate from there. Good luck!

    • 4
Mar 12, 2019

You make some bold statements regarding PDT. Do you work there or know people there? Because its hard to claim they are not silo'd / provide more opportunity unless this is so.

How would you know if they pay better compared to Citadel / Two Sigma? Also, I've heard PDT has a very onerous noncompete too.

Mar 12, 2019

"You make some bold statements regarding PDT. Do you work there or know people there? Because its hard to claim they are not silo'd / provide more opportunity unless this is so."

I know for a fact that PDT goes out of their way to advertise themselves as being very collaborative and interested in making long term investments in new hires. The researchers there are all highly academic and PDT claims to have a very low turnover rate. I haven't seen any indications that any of their claims are exaggerated, but of course any such claim is hard to truly verify.

"How would you know if they pay better compared to Citadel / Two Sigma? Also, I've heard PDT has a very onerous noncompete too."

I was actually trying to state the opposite -- I would guess that because of the conditions/atmosphere at the company, the pay would probably be slightly less (similar to RenTech), but this would be balanced by heightened job security and lower stress. An onerous non-compete does make sense if the company is as collaborative as they claim.

Mar 12, 2019

I have a friend and former coworker that switched to PDT (has left since). I have interviewed candidates from Citadel, PDT, and 2S (among others), for jobs at my firm. I mentioned this in my original comment (the interviews) so you should maybe read more closely.

I never claimed that any one of these shops paid better or worse than the other. I do have information about that, from interviewing candidates, but there's a lot of variance. I also didn't claim PDT's non-compete was any shorter. Only that 2S and Citadel have long ones. In particular, compensation and non-compete length varies from one role to the next at all these shops.

Work on your reading comprehension before you criticize others my friend.

Mar 12, 2019

Groovebus,

Thanks for the reply. There is some knowledge here.

Employer ranking for me is important in this context because Citadel/Two Sigma/D.E. Shaw are established entities that have a long track record. I suppose you can say the same for PDT partners, but as an independent entity they are fairly young -- so comparing against an offer from one of the 3 former firms is a bit tricky.

"You've got a few more misconceptions. The "40 hour work week" is a joke. No one is going to time how long you sit at your desk. Your colleagues will be very smart and work very hard. If you want to develop something profitable and move up in the firm, expect to work a lot more than 40 hours a week. You might not get fired if you work only 40, that's the most that can be said. Every place claims they have a collaborative work environment and investment in new hires. It's an empty statement. Citadel and Two Sigma are well known for being extremely silo'd, largely to protect their intellectual property. You are prohibited from meaningfully collaborating with 95% of the company. Wake up."

I think you have got my statement a bit backwards here, and perhaps that is due to my wording. My point is that PDT represents a very academic-style work environment, wherein a 40 hour work week is the norm and stress is low. I'm not strictly claiming PDT to be that relaxed, but I do get the impression that culturally it is much more like that than your typical hedge fund (which is the culture you allude to in this post). That being said, they do appear to be very very selective in who they hire (again, similar to RenTech).

Anyway, I'm not against working hard myself but comparing two environments that seem so opposite is a bit tough, especially for someone who is just coming into the industry from a long academic tenure. Thanks for your perspective.

Mar 12, 2019

The quant trading world is pretty small. I know you have a hard time accepting this from where you sit, as brand is everything to students, but there is literally no advantage to those three firms over PDT. The market is pretty efficient with respect to entry-level pay. If you look to change firms, you will get an interview everywhere if you are coming from PDT or the other firms mentioned.

You are stuck in the mindset that there has to be an advantage to going to MIT over Berkley, but this is not undergrad. Every one wants a shot at that PDT cherry. There are zero PDT resumes landing on desks on Wall Street that are not getting called back for interviews. Believe it.

Mar 12, 2019

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